The exceptions that unmade the rule: Why German football’s 50+1 no longer works

By KassandraLegendary EU insider, uncovering the deepest and darkest realities of EU governance and administration

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The German Football League (DFL) has issued a statement calling for a ‘fundamental debate’ on the Bundesliga’s controversial 50+1 rule – and it’s about time.

Implemented in 1998, the 50+1 rule states that no German club is allowed to play in the DFL’s jurisdiction – either the Bundesliga or the second Bundesliga – if commercial investors hold more than 49 percent of voting rights in the club.

The problems with the rule begin with the simple fact that it does not appear to be adhered to or applied consistently across the board. Currently, there are no fewer than five clubs playing in the Bundesliga that seem to not comply with 50+1 regulations.

The success of these clubs speaks for itself. Leverkusen (owned entirely by the pharmaceutical company Bayer) and Red Bull’s trailblazing outfit RB Leipzig are currently sitting at second and third in the league respectively, outdone only by Bavarian behemoths Bayern Munich. RB Leipzig can circumvent the rule because they only have 17 members – and most work for Red Bull. As a result, the company putting the money in makes the decisions. Indeed, it is the freedom to make these decisions that attracts the money in the first place.

Even Bayern, well-heeled as they are, want change: chairman Karl-Heinz Rummenigge has stated that “everyone must decide for himself whether to open the door for new investors…you must leave the decision with the clubs if they want this…we are the last of the big five leagues in Europe to keep out investors”.

Freed from the rule, clubs can be dynamic – even radical – at board level, resulting in the meteoric rise of clubs like Hoffenheim – catapulted from village team to the Bundesliga by sudden investment.

It is no surprise, therefore, that the DFL has recognised that Germany’s top leagues need to drastically rethink their restrictions on voting rights, precisely in order to ‘open up to new development possibilities.’

The DFL’s announcement to review the 50+1 rule is long overdue, and the news comes thanks to a protracted effort by several clubs’ owners to revise it.

Notably, Hasan Ismaik, of TSV 1860 Munich, has frequently outlined the unfairness inherent in a rule that is applied inconsistently to different clubs across the league. The fact that so many exceptions already exist to 50+1 make its unequal application a systematic competitive disadvantage for those who are still forced to adhere to it.

This is a matter of no small concern for the DFL, which is liable to face legal action on account of the rule. Indeed, this is precisely the course that the contrarian owner intends to take.

Ismaik has previously announced his intentions to take the 50+1 rule to the European Court of Justice in Luxembourg. According to Der Spiegel; as a clear infringement of European competition law as well as an ‘inadmissible obstacle to the free movement of capital’, there is no doubt that the ECJ would overrule it in an instant.

Last week, Hannover 96 president and owner Martin Kind followed suit, revealing that he expects the rule to be overturned by the DFL. If it is not, however, he has said that: “the alternative is the legal process…” because “…these are the rules of the game.”

The disputable legality of 50+1 raises a series of uncomfortable questions surrounding the treatment of Ismaik in particular. Notoriously, the Jordanian investor who saved 1860 from bankruptcy in 2011 (by investing in 60% of the club’s shares) has been blocked at every attempt to steer 1860 towards a more successful and financially viable future – both on and off the pitch.

Ismaik, who made his name rescuing underperforming firms from the brink of collapse and transforming them into multi-billion-dollar companies, has been denied any such success at 1860 on account of the ruthless restrictions implemented by the club’s board at every turn.

The unique ferocity with which the 50+1 rule has been enforced against Ismaik has even raised eyebrows in Germany. Football magazine Kicker disclosed internal club documents revealing senior board members’ intentions to inflict ‘death by a thousand cuts’ – by outright refusing to implement any of Ismaik’s proposed strategic changes, the board hoped to bleed its foreign saviour dry in a self-righteous attempt to oust him from the club.

Unsurprisingly, when Ismaik was called upon to pay the necessary fees for the third league’s licence following 1860’s relegation last year, he refused. As a result, 1860 were relegated to the Bavarian Regional League – where 50+1 has never applied.

Upon 1860’s relegation however, and seemingly overnight, the Bavarian Football Federation (BFV) introduced the 50+1 rule. Concerns have been expressed over the speed of the change, and whether other members of the Federation had time to formally approve the new rule. It is as yet unclear why the BFV and its President, Rainer Koch, a judge on the Munich Supreme Court, decided to impose the rule at this exact moment. Koch unreasonably maintains that 1860 would always be subject to the rule, since adherence to the DFL and DFB byelaws (including 50+1) is a requirement of the agreement the club signed with the BFV. If taken at face value, this would infer that 50+1 is applicable to all teams playing in the lower league. That said, it currently seems that the rule is not applied to the league’s smaller clubs, only to 1860: under the BFV, 50+1 is not a rule – it’s the exception.

Whether in the Regionalliga or the Bundesliga, the fact is that the 50+1 rule no longer attends to any discernible purpose. By contrast, its inconsistent implementation serves only to aggravate the unequal treatment of football clubs in Germany. In the words of the DFL president: “it appears appropriate to put the wording and the implementation of the 50+1 under scrutiny”. In light of Kind and Ismaik’s struggle, that scrutiny is as urgent as it is essential.